Reluctant actor, master of self-deprecation, tousle-haired English fop. Tonight a new description must be added to the list of Hugh Grant's qualities: modern art collector who has struck the jackpot.

An Andy Warhol work owned by the Four Weddings and a Funeral star will go on sale in New York as a centrepiece of Christie's auction of post-war and contemporary art. The portrait of Elizabeth Taylor, called Liz, from 1963, is expected to fetch up to $35m (£17m), 10 times the sum that Grant paid for it at a Sotheby's auction in 2001. Or to look at it another way, a profit of about $5m for every year he has owned the painting. Not bad work if you can get it.

How well the Warhol performs at auction tonight has ramifications that go far beyond the state of Grant's already healthy finances. The sale marks the start of two weeks of New York auctions by the three big houses - Christie's, Sotheby's and Phillips de Pury - that are being closely watched by art dealers, collectors and artists themselves for clues to the art market.

The three houses expect to make anything up to $2bn between then over the fortnight, -an increase even on last year's sales, when Christie's smashed several records, including the highest sum paid for a Warhol when it sold Green Car Crash (Green Burning Car 1) for $72m - twice its estimate.

But these astonishing figures belie the fact that the market is jittery. There are fears that the steady rise in prices for contemporary art over more than 10 years is unsustainable. America's mortgage crisis and the trouble for US banks has also raised anxieties of a possible global downturn ahead, which would hit luxury markets - fine art among them - hard. When the sale in New York of impressionist and modern art by Sotheby's fell below its low estimate last week, some analysts saw this as a sign the bubble had started to burst, sending the auction firm's share value tumbling.

So, much is riding on the fate of Liz, a silk-screen print on canvas measuring 40 in by 40 in (100cm by 100cm). The work is one of 12 that Warhol made of Taylor. It shows the actor against a rich turquoise background, her lips leaping out in startling blood red.

The painting captures Taylor at the height of her fame and beauty - it is modelled on a still photograph from the 1960 film, Butterfield 8. But in classic Warhol style there is a dark twist, like his contemporaneous series of Marilyn Monroe after she committed suicide, and Jackie Kennedy after her husband was assassinated. His choice of Taylor as subject matter is morbid as well as adulatory. At the time the print was made she was recovering from a serious illness. "Like many of his 60s works, Warhol was asking, 'What price glory'?" said Thomas Sokolowski, director of the Warhol museum in Pittsburgh. "There's also the sense of Liz Taylor as a factory-made product, constructed on an assembly line into a star."

Other prize items in the Christie's auction include Lucian Freud's portrait of his daughter Isobel and her partner, Ib and Her Husband, a 1992 painting expected to achieve more than $15m; Jeff Koons's Diamond (Blue), an eight-foot (2.5-metre) high simulation in polished steel - estimated price: $20m; and two works by Mark Rothko, Untitled (Red Blue Orange) - estimate: up to $30m - and No7 (Dark Over Light) -estimate up to $30m.

How these works perform along with Hugh Grant's baby should give a much clearer indication as to whether the confidence of the soaring international art market has really been dented. With the dollar at historically low levels against foreign currencies, overseas buyers from among the new wealthy of Russia, China and South Korea, as well as from the oil-rich oligarchies of the Middle East, are expected to dominate the bidding. In advance of the sale, Christie's has been making direct approaches to foreign buyers, shipping one painting to the home of a collector in Hong Kong for private viewing.

Whatever happens tonight, Grant is certain to receive a cheque from Christie's that will inspire one of his famously charming smiles. He is the beneficiary of one of the last guaranteed prices to have been given out by the auction houses. A year ago such guarantees were common as the auctioneers competed against each other for big-name works of art. But amid the current jitters about the future health of the market, no more guarantees are being given out.

Grant's guarantee is said by some to be as much as $20m, which at almost seven times the price he paid for the Warhol would still represent a handsome profit.